jump into fireGiven that the euro area is moving toward a pro-forma inclusion of the depositors bail-ins in the standard toolbox for dealing with the financially distressed national banking systems, the case for gradual cost-minimising increase in long term share of these instruments in individual investors portfolios is being made not only by the market forces, but also by regulatory changes.
Contrary to the short-term signals in the spot markets, gold and other precious metals role in delivering long-term risk management opportunities and tail risks hedging is becoming more important as the immediate volatility and short-term risks recede.

jim willieSince June of 2012 I’ve been talking about Iran circumventing SWIFT and though it hurt their economy, initiating devastating inflation and great harm to the Iranian people, Iran has taken the hits from the sanctions but founded what could now be called the PETRO GOLD system.  It’s allowed Iran to sell oil to China, India and Japan for gold.
Iran was able to ship oil in shadow tankers, GPS turned off, receiving wheat, edible oils and gold in exchange. Dubai was a laundering point for the gold along with Turkey as a transhipment point the gold payments.
Iran proved this system worked and it dovetails nicely into China’s plans. This may have been one of the most important puzzle pieces that came out our sanctions.
The jailer may find he is a prisoner of his detainees when sanctions reverse course and bite the US in the a**.

silver break freeIn this excellent interview with Finance and Liberty’s Elijah Johnson, Chris Duane discusses the likelihood that the CIA is involved with Bitcoin as a method to funnel wealth away from gold and silver into an electronic currency and as a method to preserve their power during and after the coming collapse of the US dollar.
Duane contends that the next move in silver will break the financial system as the debt Ponzi ultimately implodes and the current decline below $20 will soon be a distant memory to precious metals investors.
Full MUST LISTEN interview is below:

The reality is relatively simple even though the appearance is complicated and confusing.

  • Wars that are hugely profitable for a few individuals and businesses
  • Unauditable Pentagon accounting
  • Government debt that will never be repaid
  • Levitation of S&P and bond markets
  • Gold price suppression

We all know “something is wrong” but we keep riding the same corrupt “gravy train” because it works for many powerful people. Consider the interlocking complicity involved in the following:

silverA common misconception in markets about the price of gold is that rising interest rates for a currency will always drive the price of gold down against it.
Today the market can best be described as confused. Prospects for economic growth and price inflation are far from clear to the market consensus, so talk of tapering by the Fed is seen as injecting a deflationary bias. For this reason, when bond yields rise, gold weakens.
Traders in paper markets are only interested in short-term relationships, and therefore pay little or no attention to long-term fundamentals. If we consider the relative increases in the quantity of gold and a fiat currency such as the dollar, gold today is demonstrably undervalued compared with where it was before the Lehman crisis. This is confirmed by physical metal being driven out of market circulation.
Sooner or later, those traders ignorant of Gresham’s Law and believing that interest rates are the sole determinant of the direction of prices will get an interesting wake-up call.

What would happen if the Chinese prominently announced their gold holdings publicly? Surely such an announcement would shock the financial world, and even more so if they then publicly called into question the status of US gold reserves (unaudited since 1952, probably for good reason).  What if China made the claim that they now have the largest amount of gold reserves of any nation on earth, and dared the US to prove them wrong with a fully public audit?  What if they announced this fact while at the same time prominently noting all of the separate trade agreements they have signed in the last two years that cut out the US Dollar from trade settlement-  you know, the agreements they have signed with Russia, India, Japan, France, Australia, Brazil, and others?  It seems quite probable, in such a scenario, that gold priced in USD would reset quickly some multiples higher.

BernankeSlowly, the status of the dollar as reserve currency is slipping away, threatening hyperinflation.
The recent rise in interest rates, in response to the threat of Fed tapering, foreshadows the unavoidable demise for the dollar. Not only did the rise in rates have an immediate effect on the housing recovery, it also indirectly exposed the system to another vulnerability, that is, the Fed is not only the lender of last resort but will be the lender to the spender of last resort – the US Treasury.
That all fiat currencies end the same is no secret.
Reserve currencies are not immune. Slowly, the status of the dollar as reserve currency is slipping away.
Rumblings of a re-arranging of trade status are approaching a feverish pitch.

Bernanke-Dimon-Fed-TunnelJPM is now NET LONG Comex gold futures to the point of having cornered the paper gold market. Since, for now, paper Comex trading continues to determine global price, nothing could be more important.
As we’ve documented here since last July, in 2013 JPM has successfully converted what had been a massive NET SHORT Comex gold position into an equally massive NET LONG Comex gold position.
Thus far, through just the first four delivery days, the JPM House Account has stopped 1,011 of the total 1,086 deliveries made. That’s 93.1%! So, please follow along with me here:

  • JPM is NET LONG to the point of cornering gold futures
  • JPM is taking delivery of 93% of the December contracts
  • Unlike the past, it now clearly benefits and profits JPM to see price rise- do you seriously think gold is headed lower from here?

Therefore, remain patient and diligent. Watch for a turn in price off of the June lows. A December move back above $1250 in gold and $21 in silver will begin the process of Spec unwind and short squeeze, setting up a continued rally in January. By holding physical precious metal, you are protecting and insulating yourself against the certain global economic madness of 2014 and beyond.

paper goldPreparations have been or are being put in place by the international monetary and financial authorities for bail-ins of both banks but also other financial institutions. The majority of the public are unaware of these developments, the risks and the ramifications.
The important shift from bail-out to bail-in had not been signalled in a very public way prior to Cyprus. The market’s expectation was therefore confounded when Eurozone finance ministers imposed bail-ins on Cyprus. This forced bondholders to convert into shareholders, and critically, imposed an element of bank deposit confiscation and the forced conversion of these deposits into bank equity.
Never before in the public’s perception had bank deposits been countenanced as potential financing sources for the rescue of insolvent banks. The public was shocked by the freezing and confiscation of deposits and the use of them in a desperate attempt to prevent banks from failing.
The coming bail-ins regimes will pose real challenges and risks to investors and of course depositors – both household and corporate. Return of capital, rather than return on capital will assume far greater importance.
Evaluating counter-party risk and only using the safest banks, investment providers and financial institutions will become essential in order to protect and grow capital and wealth.
It is important that one owns physical gold and not paper or electronic gold which could be subject to bail-ins.

GFMS SILVER Coin ChartAs the world continues down the road of self-destruction via its highly leveraged paper financial markets, there’s a much more fascinating story worth looking at. 
Hidden from the majority of the public and misunderstood by the so-called professional metal analysts, is the Real Story Behind Silver.

Alex Wong/Getty Images

Alex Wong/Getty Images

Eric Sprott recently joined Matterhorn Asset Management’s Lars Schall to discuss the metals, QE, and how the great Keynesian fiat experiment is likely to end for Western governments.
Sprott claims that the West will one day soon regret all of its financial policies including QE, ZIRP, and gold suppression, and that the major governments carrying out these policies are now insolvent!
When asked by Lars what would be the signal to exit the gold and silver markets and what he views as the top in gold Sprott replied: For me to see a top in gold you would need to see 1 of 3 things: A maniacal blow-off.  2. The Central Planners become financially responsible (not likely).  3. If they finally capitulated and made their currencies gold-backed (which I don’t suspect we will see).  I think we have a long way to go before we see any of those elements manifest themselves.

The too big to fail banks were in the headlines every single day and our politicians promised to fix the problem.  But instead of fixing it, the too big to fail banks are now 37 percent larger and our economy is more dependent on them than ever before.  And in their endless greed for even larger paychecks, they have become insanely reckless with all of our money.
Mark my words – there is going to be a derivatives crisis.  When it happens, we are going to see some of these too big to fail banks actually fail.
At that point, there will be absolutely no hope for the U.S. economy.
We willingly allowed the too big to fail banks to become the core of our economic system, and now we are all going to pay the price.

Investors are all playing the same dangerous game that depends on a near perpetual policy of cheap financing and artificially low interest rates in a desperate gamble to promote growthThe Fed, the BOJ (certainly), the ECB and the BOE are setting the example for global markets, basically telling investors that they have no alternative than to invest in riskier assets or to lever high quality assets.

bitcoin silverI hereby make a prediction: Bitcoins will go down in history as the most spectacular private Ponzi scheme in history. It will dwarf anything dreamed of by Bernard Madoff. (It will never rival Social Security, however.)
The fundamental characteristic of money is its relatively stable purchasing power.
Bitcoins will never achieve this. It is a mania going up. It will be a mania coming down. It will not increase the division of labor, because people will recognize it as having been a Ponzi scheme, and they will not again buy it. They will not use it in exchange. Companies will not sell goods and services based on Bitcoins. Bitcoins have to have stable purchasing power if they are to serve as money, and they will never, ever achieve stable purchasing power.
There has to be an economic justification for a capital investment, and there is no economic justification of buying Bitcoins as an alternative currency.  The Austrian theory of money shows why.
I do not invest in capital that has no economic justification other than the greater fool theory. There are too few fools to keep the scheme going.
Bitcoins are the 2nd biggest Ponzi scheme in history.  You can’t say you weren’t warned!

haircut bail-inThe era of bondholder bailouts is ending and that of depositor bail-in is coming.
The changing financial landscape post crisis poses challenges to savers and investors globally. It is important we consider how savings and investments can be protected.
Bail-ins are a risk in the coming years and yet there is a lack of appreciation of this risk as there was a lack of appreciation of the risks posed by property bubbles and the global debt crisis.
It will take a number of years for the final configuration of the new financial order to become clear. This means that there are difficulties inherent in selecting appropriate investments when the ultimate outcome is unclear. Apart from that, what we do know at present is that there are straws in the wind that should concern savers.

David Morgan’s mining analyst for the Morgan Report discusses China’s massive import of 130 tons in October alone and unprecedented global demand for both gold and silver, while the cartel prepares to send paper metals prices to a re-test of the June lows of $1178 and $18.
Are new lows and the best stacking opportunity since 2008 imminent? The Morgan Report believes silver will hold, but gold is heading back to $1,000 in December!

Douglas Jackson the founder of e-gold, before it was shut down by US authorities, is now in the talks with a organization called Coeptis that hopes to launch a gold backed “bitcoin style” digital currency.
The idea is great, but the question is will he be able to pull it off? Western Central banks will certainly be opposed to this idea. Will he truly be able to create a decentralised gold backed digital currency? If somehow this is pulled of by Mr. Jackson or anyone else, then the results will truly be game changing.

BubbleOne of the men that won the Nobel Prize for economics this year says that “bubbles look like this” and that he is “most worried about the boom in the U.S. stock market.”  But you don’t have to be a Nobel Prize winner to see what is happening.  It should be glaringly apparent to anyone with half a brain.  The financial markets have been soaring while the overall economy has been stagnating.  Reckless injections of liquidity into the financial system by the Federal Reserve have pumped up stock prices to ridiculous extremes, and people are becoming concerned.  In fact, Google searches for the term “stock bubble” are now at the highest level that we have seen since November 2007.  Despite assurances from the mainstream media and the Federal Reserve that everything is just fine, many Americans are beginning to realize that we have seen this movie before.  We saw it during the dotcom bubble, and we saw it during the lead up to the horrible financial crisis of 2008.  So precisely when will the bubble burst this time?  Nobody knows for sure, but without a doubt this irrational financial bubble will burst at some point.  Remember, a bubble is always the biggest right before it bursts, and the following are 15 signs that we are near the peak of an absolutely massive stock market bubble…